Transformational, transactional, trait and situational leadership theories show how certain characteristics of leaders make them effective at motivating and encouraging others to do better. For example, trait theories have an assumption that individuals inherit unique qualities that make them better suited to become leaders. In contrast, situational or contingency theories suggest that leaders’ actions vary depending on the external conditions in which they are placed (Raines, n.d). In a commercial bank that operates in African, Asian, and European countries, a situational approach is imperative because it allows changing leadership depending on the management expectations of each country and its business environment (Indeed Editorial Team, 2021). In Asian organizations, employees rarely speak about their concerns regarding their workplaces. In the Western view, it is expected that workers talk openly about their emotions and voice their opinions regarding different situations.
Depending on the location of the commercial bank’s office, expectations of leadership will vary. Besides, the company’s leadership approach has been characterized as a combination of transformational, transactional, democratic, and authoritative, which may not coincide with the methods to which different countries adhere (Northouse, 2018). For example, a situational leader can show authoritative qualities when a situation calls it to act in such a way, while a manager can be stricter in assigning tasks and responsibilities to reach the set goals (Indeed Editorial Team, 2021). Employee and business performance in the commercial bank will depend on the way in which leadership has been structured and facilitated. The knowledge of leadership theories is relevant to both areas of performance because it allows for defining the characteristics of the workplace and helps identify strategies that should be implemented. Continuing the example of situational leadership application in the commercial bank, a leader in the European context is more likely to implement transformational leadership because the Western framework expects positive relationships between leaders and workers. When there is a need to increase performance beyond motivation and good relationships, transactional leadership is introduced to focus on work outcomes and performance measurement.
Reference List
Indeed Editorial Team. (2021) 6 leadership theories for career growth. Web.
Northouse, P.G. (2016) Leadership theory & practice. 8th edn. Thousand Oaks, CA: Sage.